Question from my Nanny (taking on 2nd job)

[WhippinPiccadilly1]

My Nanny just got offered a 2nd job working 4 hours a day 3 days a week in school holidays. She works for me 2 days a week (13.5 hour days).

For me she is employed, we have PAYE set up etc etc. Her take home puts her just below tax threshold for me. NI is about £20 a month. We agreed a gross pay.

The other person wanting to employ her wants her to be self employed. I don't think she can be, but I said it look in to it for her.

The other issue she wants to know is, what will happen with regards to her other wage (also agreed as a gross pay). She is employed for 12 hours a week, 13 weeks of the year. She will earn £80 per day. (Yes, other parent agreed to pay her £20 an hour!)

She is using her allowances with me, so will she be on BR with her other wage? How does that work out in terms of tax and NI? I've no idea because I've never had 2 jobs. Can anyone advise how this will work out for her pay?

Thanks!

If the other family want commitment then they need to employ her. They will have the admin cost of that but may not have any or just a little employers NI as the pay level is going to be low.

Well done for agreeing a gross salary with your nanny, that helps protect you from any changes in your nannies personal tax situation. Good for your nanny as well as they benefit from a rise in personal allowance.

Does your nanny already run their own small business providing ad-hoc childcare/babysitting? If so and if they did not make any commitment to doing those 3 days every week but instead took individual bookings each time, then possible could put though their business but they would need to change appropriately - they need to be in control of what they do, when they do it, fees etc... and £20 per hour maybe appropriate given the lack of employment rights and the time spent doing accounts, chasing debts.

No change to the wage you pay her. Not sure what is meant by "what will happen to her other wage". Does she mean how much tax will she pay? Income tax will be 20%, National Insurance is harder to calculate... there are PAYE calculators which can help with that.

Yes, BR code most likely for second job, thus 20% Income Tax.

NI roughly £10 per week.

Wrong picture, see if I can pick the right screen shot this time.

nanny can call hmrc and ask them to allocate X of the personal allowance to your employment and Y to the other. hmrc will then send you a new tax code to use. sounds like she should be an employee for her second job

Yes, come 6th April if your nanny earns less than £11,500 in your job and if they have tax code BR in their second job, then they should contact HMRC (online or by phone) to request that their personal tax allowance is split between the jobs.
No point doing it now though as it can only be done once in both jobs and employers are registered with HMRC plus it is near end of tax year so HMRC will be reluctant to do it, as would need to be redone in April anyway.
The reason for splitting the tax code in this situation is that being on BR code and earning less than £11,500 in main job, will create an overpayment of income tax.

I have 2 part time jobs, I called the tax office they split my tax code. Very easy to do, took a few minutes, they just needed to know how much I would earn, in each job.

Sorry to butt into your thread op but I have a question for nanny nick and thought it would save me creating a new thread about virtually the same thing.
I'm a nanny and from September everything is changing. My main 2 day a week job will likely be more than £11,500 per year. Is it OK then for those to me my main tax code and then my other part time jobs can be a BR tax code? Thanks!

Yukbuck, yes assuming all are agreed as gross salary. If any are Net pay agreements, the cost to parents will go up quite a bit if you have BR code, so they may not be very happy.

Thanks for the responses!

I'll look in to splitting the allowance. Will that only work if she receives the same monthly pay from me? She has been with me since July, and her wage has varied. She has had odd days off sick, which she isn't paid for (we agreed to SSP only). She has also done extra hours as babysitting for me (she was my babysitter before Nanny). So the total pay does vary month to month. She should be earning approx £10500 with me.

She will earn £240 per school holiday week for the other family. So approx £3000 sporadically through the year.

I'm also concerned she may end up overpaying on NI due to the sporadic pay (she's a family friend, and just turned 19 so I want to help her maximise her income). Am I right to be concerned about that? Or does it make no difference?

She's 19, so no employers NI for either family. Which helps!

Thanks again!

Having a gross pay agreement in both jobs makes it much easier, as HMRC will just adjust things if needed. NET pay is where issues occur.
Total earnings are around £13500 gross with your job representing around 78%.
I would be inclined to go for a 80/20 split, so allocating £9200 of personal tax allowance to her job with you and £2300 of personal tax allowance in their job with the other family.

I'll look in to splitting the allowance. Will that only work if she receives the same monthly pay from me?

It will work regardless but if they did not earn enough in total in the year from each employer to match the split percentage, then they may be an adjustment made at year end.

It is purely looking at Income Tax, so across both jobs she is earning over personal allowance (2017/18, personal tax allowance is £11,500), so as long as he earns over the split amount during the entire financial year, it should work fine.

NI is calculated every time they are paid. Primary Threshold is £680 month, so if payroll is done monthly there will be months in her second job where she won't have an employee NI deduction - such as February half term. Weekly Primary Threshold is £157 which she would be over if paid £240 in a particular week.

www.gov.uk/guidance/rates-and-thresholds-for-employers-2017-to-2018

The other family are out of order for seeking what's often called "false self employment" when it's clearly an employment relationship.